However, both lending and market share have grown each quarter of 2011, after the first half of the year was hit by a weaker pipeline from Q4 2010 that saw pricing become less attractive for lower LTVs, Santander said.
For the year to Q3 2011, Santander UK, including Abbey for Intermediaries, recorded £16.8bn of gross mortgage lending, down 13% on 2010’s £19.2bn.
Its market share for the same period this year was 16.5%, down from 19% for the year to Q3 2010, but Santander said in its trading statement that its market share was “well above our natural stock share”.
On a quarterly basis, Q3 gross mortgage lending and market share increased on the previous quarter and year-on-year.
Third quarter lending was £7.1bn, up 29% from £5.5bn in Q2, and up 3% from £6.9bn in Q3 2010.
Santander’s market share of gross mortgage lending in Q3 was 18.5%, up from 16.3% in the second quarter and 18.4% in Q3 2010.
Net mortgage lending remained positive in Q3 at £0.2bn, but was down from £0.6bn in Q2 and £1.8bn in Q3 2010. Overall, for the year so far, Santander has seen net mortgage lending drop 96%.
The lender’s new business LTV for the nine months to September was 65%, while its indexed stock LTV was 52%, with both remaining “broadly stable” over the last seven quarters.
Andy Smith, head of media relations at Santander UK, said: “While our gross mortgage lending is down, our market share remains consistent in a market that is shrinking.
“We are lending more than our competitors and, at the end of the year, we aim to retain our position as the number one intermediary mortgage lender.
“We will remain competitive and open for business. If the market is buoyant then it is possible our Q4 figures will be higher than Q3. However, it all depends on demand.”
In the trading statement, Ana Botín, chief executive officer of Santander UK, said: “Santander UK has delivered another solid set of results despite the difficult market conditions.”
She added: “We have continued our strong support for UK homeowners and business. In the first nine months of the year our share of gross mortgage lending was c. 16%, which is well above our stock share, and means we are writing one-in-six UK mortgages.
“In the last two quarters, we have recorded positive net lending despite weak demand, while in SME lending, we are running ahead of our commitments made under the Merlin agreement. Lending to this vital sector was up 27% on the same point last year.”
